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Neoliberalism: Paved With Good Intentions

Stephen is an online writer and former English teacher who is interested in sociology, economics, and literature.


There is much to admire in traditional conservative thought. The value of tradition, the importance of free trade, and individual liberty are but three of the pillars that support an impressive edifice.

Unfortunately, especially in the years since the Second World War, these values have opened the way to an interpretation of modern society that is sure to lead to a rupture in the social fabric that may well be impossible to repair.

Samuel Smiles

Samuel Smiles

Self Help with Smiles

"Even the best institutions can give a man no active aid. Perhaps the utmost they can do is to leave him free to develop himself and improve his condition. But in all times men have been prone to believe that their happiness and well-being were to be secured by means of institutions rather than by their own conduct."

So wrote the influential Scottish author Samuel Smiles in his book Self Help published in 1859. Smiles was writing as the Industrial Revolution reached its peak in Britain (the United States would do so after the Civil War).

When he published his book, over half the British population was living in the expanding towns and cities. There is nothing in the above quotation that politicians such as Margaret Thatcher or Ronald Reagan would have disagreed with, as they both emphasized the old virtues of self-reliance and individual responsibility.

Smiles was a man who valued hard work and moral rectitude. People who demonstrated these qualities could fight their way forward and help forge a strong society. He clearly demonstrates this by opening his book with a quote from his older contemporary John Stuart Mill:

"The Worth of a State, in the long run, is the worth of the individuals composing it."

Self Help is littered with examples of people who came from humble backgrounds and made a name for themselves in one field or another. Although directed at a British readership, the book was immensely popular in the United States. There, it reinforced the idea that America was a land of opportunity. Anyone could rise, through hard work and application, to any position in the land.


Missing the Point

In a recent article in Aeon magazine titled "The Ungreat Replacement," John Rapley tells us that those who blame immigrants for taking jobs away from native citizens are fixating on the wrong problem. Immigrants are not responsible for the ills that are affecting modern western society. People who are prone to lay the blame on the innocent are misguided. He states:

"The actual architects of their fate, who know what they've done, prefer to keep it silent, allowing their victims to wallow in mad conspiracy theories because it turns their eyes away from the real culprits."

Of course, not everyone who is suffering believes in conspiracy theories. But people are often unclear about what has happened and how to react to it.

Professor Rapley believes that the problem lies with the doctrine of neoliberalism. That international trade should be as free as possible is beneficial. It allows goods to flow unhindered from producers to customers, competition lowers prices, improves quality, and guarantees choice.

But this liberal attitude to trade was extended to other areas of society. Taxes were cut—good for the wealthy, but not so good to those who depended on central funding as government investment was reduced on everything from welfare to essential infrastructure. Workers suffered as industries were deregulated and companies sought cheaper labor abroad.


Into the Jaws

The Industrial Revolution of Smiles' time saw a fundamental change in the structure of the British economy and society. People were moving from the world of smallholding and cottage industries to new industrial centers.

At first, conditions were miserable for many in the unsanitary towns. But gradually, improvements were made and, when Smiles published his book, there were opportunities for the ambitious to improve their lives.

Gradually, manufacturers came to see their workers not only as wage slaves but as potential consumers. Wages went up, advertising became a booming industry, and eventually, cheap credit was introduced to satisfy the demand for immediate gratification and to keep the machinery of the market well-oiled.

The trap was set. But it was a trap that nobody had designed; it was a natural result of market choice and the consumer's desire to live life to the fullest. Smiles would have been horrified.

Neoliberalism removed the brakes. People were free, but the freedom to assume debt destroyed many. As well-paying, long-term manufacturing jobs disappeared, people found themselves working at minimum wage in an unrestricted market that was putting downward pressure on wages.

Defenders of neoliberalism maintain that it is a guarantor of freedom. It is anything but. Some few benefit, but the majority of people are trapped in a world that is swept by market forces that are beyond the control of any one nation-state—even one as economically powerful as the United States.


The New Economy

Of course, there are jobs in the new computerized era. But the well-paying ones demand skills that a redundant factory worker might find hard to pick up. The under-educated are left with a selection of fairly menial opportunities in the service sector.

Quite simply, there are not enough jobs to go around, and those that exist don't allow a worker to buy a house, educate her children, or cover medical expenses. A swathe of society finds itself in an extremely vulnerable position where they are living from paycheck to paycheck.

Household debt in the United States stands at around $266 billion.


No Going Back

Until recently, when strangers met at a party, one of the first questions that they would ask was "What do you do?" It's a risky question these days, but it illustrates how important work is to most people. Work was not just a source of income, it gave people a sense of identity and worth. But that was the world of Samuel Smiles.

Now, people don't understand what has happened to their world and blame immigration or outsourcing. These are not the culprits, but populist politicians will pander to voters' resentments with empty slogans that only serve to inflame the passions of a scared electorate. This fractures politics and renders thoughtful debate almost impossible.

We need to refocus and build a community in which work is not so important. Societies in the West create enough wealth to ensure that people have a safety net and can be educated to find value in other aspects of life. That people aren't going to be better off generation by generation is not their fault.

The free market is here to stay but we will have to re-channel education to help citizens adapt to the new world and greet the future with lower material expectations.

Hamster Wheel


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